Byju’s Valuation Of $22 Billion Faces Challenges As Financial Accounts Delayed
New Delhi, 26th June 2023: According to a Bloomberg report, Byju Raveendran, the billionaire founder of the ed-tech giant Byju’s, has assured investors that the company will release its financials and strengthen its accounting processes. This comes after the departure of the auditor and three board members within a week.
During an investor call, Raveendran openly acknowledged his shortcomings in implementing effective processes that could have facilitated the timely closure of the accounts. He mentioned that the company is working on improving its systems with the assistance of a newly appointed finance chief and general counsel. Byju’s has hired MSKA & Associates to replace Deloitte Haskins & Sells and aims to finalize its fiscal 2022 numbers by the end of September.
Byju, with a valuation of approximately $22 billion, has faced difficulties due to missed deadlines in filing audited financial accounts. Recently, the company failed to make $40 million in interest payments on a term loan raised in November 2021. As a result, Byju’s filed a case against one of its lenders in the New York Supreme Court and sought the disqualification of the lender, labelling it “predatory.”Nevertheless, the consortium of lenders, who possess a combined ownership stake of over 85% in the $1.2 billion term loan, dismissed the lawsuit as lacking merit.
To cut costs amid increased tension with lenders, Byju initiated layoffs across departments last week. Reports suggest that over 1,000 employees, mostly senior staff with over 2 years of tenure, are expected to be affected.
In late April, the Enforcement Directorate (ED) conducted searches on Byju as part of a foreign exchange violation probe under the Foreign Exchange Management Act (FEMA). The ED raided a total of three premises, including two business locations and one residential property belonging to Byju’s CEO Raveendran Byju and his company.
